Initial Coin Offering in Luxembourg

Cryptocurrencies are the latest development in the financial technology sector and Luxembourg is no stranger to the creation of digital coins considering its prestige among the financial centers in the world. During the last several years, Luxembourg has also invested in creating and supporting innovation, and thus blockchain technology which is used for the creation of virtual money has flourished.

In order to support their investments, most of the companies sell the digital tokens to those willing to invest in innovation, or better said in startup companies with a great development potential. This is how initial coin offerings (ICOs) have appeared all over the world, Luxembourg included.

Our lawyers in Luxembourg can offer information related to the legislation related to initial coin offerings.

Initial coin offerings and initial public offerings in Luxembourg

Luxembourg is one of the leading financial centers in the world and in Europe, which is why investors here are accustomed to the regulations imposed to investment funds which have been transferred to more innovative industries, such as blockchain technology, recently.

Luxembourg initial coin offerings got their name after the initial public offerings (IPOs) which imply the sale of company shares to the public. In the case of Luxembourg ICOs, companies sell virtual currencies in order to raise funds for their activities. In most cases, the same regulations applicable to investment funds in Luxembourg apply to ICOs.

 Our Luxembourg lawyers can explain the investment funds regulation applicable in the Grand Duchy.

The creation of an ICO in Luxembourg

The issuance of an initial coin offering in Luxembourg cannot happen without having a legal entity, therefore company registration is the first step for such activity. Foreign investors who want to set up companies with the purpose of issuing ICOs can register IT companies which do not require any financial license. However, financial companies seeking to issue ICOs are required to apply for a license with the Luxembourg Financial Regulator.

For full information on the licensing of financial companies for issuing initial coin offerings in Luxembourg, please contact our local attorneys.